The micro-environment

The micro-environment is basically the environment that has a direct impact on

your business. It is related to the particular area where your company operates and
can directly affect all of your business processes. In other words, it consists of all
the factors that affect particularly your business. They have the ability to influence
your daily proceedings and general performance of the company. Still, the effect
that they have is not a long-lasting one.
The micro-environment includes customers, suppliers, resellers, competitors, and
the general public.
The macro-environment
The macro-environment is more general - it is the environment in the economy
itself. It has an effect on how all business groups operate, perform, make decisions,
and form strategies simultaneously. It is quite dynamic, which means that a
business has to constantly track its changes. It consists of external factors that the
company itself doesn’t control but is certainly affected by.
The factors that make up the macro-environment are economic factors,
demographic forces, technological factors, natural and physical forces, political
and legal forces, and social and cultural forces.

The macro-environment Example

United States is one of the world’s biggest economies, which makes it a favorable
macro environment for almost any business. In 2017, the United States clocked a
gross domestic product of over $19 trillion — the highest of any country in the
world. Although it’s hard to measure, consumer spending is also extremely high in
the United States.
Aside from that, the United States has a registered population of about 325 million
people. Of these many million people, the population is split relatively evenly
among the different age groups.
As far as ethnicities are concerned, there is quite a range. This includes a
predominant portion of White Americans, as well as African, Hispanic, Native and
Asian Americans.
Macro Environment Analysis of McDonald’s
Examples of Micro Environment
Competitors
For Instance, Videocon, BPL, Onida and others are competitors of Philip
Television in Television Market. The other form of competition is “Product Form”
in which customer seeks different features and functions in a product. For example,
a customer is willing to purchase a two-wheeler car which can come with gears
and without gear, automatic or manual. These are the features of product and
services which customer would be considered during the purchase process.
Shareholders
A story that has been done by the media on a one-off, could impact on a firms’
daily operations thus becoming that firms micro environment. However, a firm
could be influenced to have long term operational decisions in a bid to avoid
negative media stories.
It is not necessary that business will control microenvironment factors all the time.
Since micro and macro environment affect marketing campaigns, companies
should conduct environmental analysis before developing marketing strategy.

The competitors of an organization can have a direct impact on business strategies.

The organization must know how to do a competitive analysis of competitors and
have a competitive advantage.  An organization must understand, what value added
services their competitor is providing or the unique selling point of their
competitors. How they can differentiate from their competitors. What benefits a
company can offer to the customers which competitors does not offer.
Other approaches for market competitive analysis is PEST Analysis, PESTLE
Analysis and SWOT Analysis as well.
An organization must understand that unawareness of competitors can make it
difficult beat the competitors and lead the market. It must know how competitors
react when there is a change in market environment such as political and legal
changes, technological change, change in consumers behaviours can impact their
business
Micro and macro environments are important because
Macro-environment often indicates a condition affecting the overall economy, and
it is not affecting a particular section of the market. A macro environment
condition will impact business decisions. Spending, investing and borrowing
activities can be affected due to the presence of a macro environment.
The micro environment relates to the immediate periphery of an organization and
directly influences the organization on a regular basis. ... It is important for an
organization to monitor and analyze all the elements of its micro
environment like customers, competitors, etc.
Threat of Substitute Products or Services
Being a host of the channels, YouTube competes with the age old electronic
devices like televisions with disadvantage of having too many advertisements.
YouTube earns it revenues through advertisements too but it is not at the expense
of patience of its consumers. Also, the TV doesn't nearly have enough genres of
videos as the website and furthermore the access to such large library is free of
cost. So YouTube is facing almost no threat from its substitutes. (Waleed, 2016)
Conclusion YouTube hosts a thousand of short films, television episodes and
hundreds of full-length movies. It has a massive collection of user-generated
content which keeps on growing. It keeps people globally connected and provides
them with ways of generating income. With the network so large, YouTube bears a
larger responsibility of providing the right content. For that purpose, YouTube has
to devise some policies and implement them to ensure the protection of rights of its
consumers.
Power of Supplier
Since Google has bought YouTube, it has now become its only supplier. YouTube
makes use of the Google's technology and other facilities. It has colocation centers
with Google Inc. (Waleed, 2016) Consequently it provides a business to Google
Inc. and holds more power in the supply chain. YouTube despite being a large
broadcasting website doesn't work alone. It makes use of technologies from
different companies to provide its best to the users. It uses TrueView for video
advertisements which let viewers skip ads after five seconds. It utilizes Google
huge databases to manage the data uploaded by its users. It is highly scalable. To
better operate with its high traffic, YouTube uses LIGHTTPD which enhances the
high performance for such hosts. Similarly, it depends on other software to
function best. However, these suppliers depend on YouTube much more for their
products to be utilized through a mostly visited hub of videos. (Waleed, 2016)
Bargaining Power of Buyer
YouTube provides the users with easier access to vast information and a platform
to engage in social activities. So the power of the buyer is less. However, YouTube
has a deeper market penetration and most of its content is posted by its consumers.
So the power resting in the hands of its consumers is moderate. (Waleed, 2016)
YouTube has many rivals like Vevo, Vimeo, YouKu Inc., Dwango Co. Ltd.
YouTube has an advantage of being freely accessible to its users. Another rival is
Dailymotion which is based in Paris and started around the same year as YouTube.
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